China Announces Major Rate Cuts Amid Trade Tensions

China's central bank has unveiled a major monetary easing package, cutting its seven-day reverse repo rate by 10 basis points to 1.4% and lowering the reserve requirement ratio for banks by 50 basis points, releasing about $138 billion in liquidity. The measures, which include reductions in mortgage and auto loan rates, are designed to address economic challenges amid weak factory activity, a struggling property sector, and subdued domestic demand. The announcement preceded high-level US-China trade talks scheduled in Switzerland, marking the first official dialogue since President Trump's significant tariff hikes on Chinese imports. Global markets reacted positively to both the stimulus and the prospect of renewed trade negotiations. Analysts, however, remain cautious about the measures' effectiveness given ongoing structural problems and the persistence of trade tensions. US Federal Reserve officials are closely watching these developments for potential global impacts.